If you need money urgently, then, one of the best options available to you is a payday loan. These are short term, unsecured loans that allow you to borrow relatively small amounts of money almost instantly. The money is borrowed against your paycheck. That is why these loans are called payday loans or instant cash advance. Since the payment is immediate and loan approval rates are very high, there is a lot of demand for payday loans. Lenders vie to provide these loans to customers because the interest rates are quite high and the term of the loan is short. The high demand-supply chain means that there are many lenders out there trying to catch the attention of borrowers looking for instant cash advance. So, how do you select the right payday loan lender?

Ironically, the first step begins with yourself. It is important to understand that for all their attractiveness, these loans are high risk loans. The interest rates are quite high and it is easy to fall into the debt trap if you borrow more than you can repay. So, decide on the amount you want to borrow. This should be within your means. When you are ready to take the loan, you have two choices. You could approach loan brokers or go directly to payday loan lenders. Loan brokers are agents whose job is purely to assist the lender and the borrower. For this, the broker will charge a nominal fee. Therefore, this option is always more expensive. When you deal directly with the lender, you do not have to pay any extra fee. Secondly, the process is quicker when the lender is involved directly.

The best way to identify payday loan lenders of repute is word of mouth. Speak to friends, family and neighbours and ask for references, if any. If you do not come up with any promising references, you could always get a list of payday loan lenders in your area from the Yellow Pages or from your local newspapers. You could also conduct a quick search on the internet. In this way, you can identify a number of reputed lenders.

After this, it is time to do some comparison shopping. It's true that most lenders will look alike at first glance. The way to identify the right payday loan lender is to evaluate lenders on the terms, policies and other features they offer. Here are some clues. Compare lenders on the APR (Annual Percentage Rate) they offer. This helps you evaluate the cost of the loan. Another important criterion is the amount of money that different lenders are willing to lend. This is particularly important if you are looking for a larger than usual amount of money. Terms of repayment and roll-over are equally important because you will have to live with the terms you accept at this stage. Flexibility in terms is important to borrowers.

The final step is to check out the credentials of the lender. Choose carefully after researching information regarding the license of the lender, their reputation and the number of years they have been in service. The above are basic checks that do not really take up too much time but can save you from huge problems at a later date.